ATC220303: Report of the Portfolio Committee on Public Works and Infrastructure on two petitions lodged by Mr IS Seitlholo, a member of the Democratic Alliance, dated 2 March 2022

Public Works and Infrastructure

Report of the Portfolio Committee on Public Works and Infrastructure on two petitions lodged by Mr IS Seitlholo, a member of the Democratic Alliance, dated 2 March 2022

 

The Portfolio Committee on Public Works and Infrastructure, having considered the petitions lodged by Mr IS Seitlholo on 1 December 2021, calling on the Assembly to:

1. investigate the construction of road D201 through a petition from residents of Greater Taung, including Tlapeng, Motsweding and Matlapaneng (ATC 103-2021-08-12) and
2. investigate the halting of the construction of road D206 through a petition from residents of Ba-Ga Maidi (Matsheng, Kokomeng, Molelema etc) Greater Taung, North West province (ATC 112-2021-08-26), reports as follows:

 

On 8 and 12 August 2021, the above-mentioned petitions were referred to the Portfolio Committee on Public Works and Infrastructure (the committee) for consideration and report. National Assembly Rule 347(1) determines that a member of the National Assembly must lodge a petition with the Secretary to Parliament for approval and tabling by the Speaker. The petitions were lodged in the name of Mr IS Seitlholo, MP. On 1 December 2021, the committee considered the petitions.

 

1. Oral presentations made to the Committee

 

1. Mr IS Seitlholo (member of the National Assembly)

 

Mr Seitlholo gave a background of the objective of the petitions. The purpose of the petitions was to appeal to the Assembly to investigate the construction of road D201 and the halting of the construction of road D206 in the North West province. He further elaborated on the matters as follows:

 

 

1. Road D201

 

On 28 July 2020, Adv Freddy Sonakile, MPL wrote to the MEC for Public Works and Roads, Oagile Saliva Molapisi seeking clarity on the tender process followed on the re-gravelling of road D201 from Pampierstad to Matlapaneng in Greater Taung.

In a tender bid document dated 4 December 2019, it shows companies who bid to re-gravel road D201. However, the company t was awarded the tender (Lebo Tebo Trading) did not appear on the bidding list.

In 2019, residents of Matlapaneng embarked on several protest actions demanding the construction of a tarred road which was promised to them by the provincial government in 2011. During an oversight to both Matlapaneng and Pampierstad, community leaders and members said that they were not informed about the re-graveling and that there was no public participation process in order for them to add their inputs. It was quite clear that the residents did not approve of the re-gravelling and that they only wanted a properly tarred road that they can use to travel on.

There are varying reports as to how much was actually spent on the re-gravelling including the total number of kilometres of the re-gravelled road. It is alleged that forty million (40 million) was spent on the re-gravelling.

In a newspaper article published by Taung Daily News in February 2021, it highlighted how the re-gravelled D201 road had become inaccessible for the communities using this road. This came after the alleged 40 million re-gravelled road was washed away by floods caused by torrential rains. The inability of communities using the D201 road meant that their lives were affected negatively in terms of cost of living, the well-being of the people involved and life in general. Transportation in rural areas tends to be expensive, unsafe and crowded due to lack of quality and accessible roads.

 

1. Road D206

The contractor in November 2020 put the construction of the 10-kilometre road upgrade from gravel to tar surface from Matsheng village to Molelema village on hold. InvestTong Construction was appointed by the North West Public Works and Roads department to construct a 10-kilometre road linking Matsheng and Molelema villages.

During a community meeting held in 20 June 2021 with community leaders, various allegations were made, ranging from the failure of the department to pay the contractor on time, the contractor being paid without any work done, and alleged tender fraud in respect of the bid amount for the project. The community indicated that the North West Department of Public Works and Roads told them that the project stopped when the contractor requested more money to complete the construction.

The department also alleged that the contractor had indicated that he can only complete 7 kilometres of the total 10 kilometres that was budgeted for if he did not get the requested amount.

However, the Community Liaison Officer (CLO) for the project, Mothibi Mokoro, indicated that the department had lied, and alleged that the department has missed two payments to the contractor, or payment to the total amount of R15 million for the three months (June, July and August) not paid and another R4 million for the two months of the work done. The CLO indicated that the total budgeted cost for the project is R65 million and it, therefore, is not practical that the contractor would ask for more money from the department. The CLO further indicated that during the months of non-payment to the contractor, he (the contractor) had to do the work and pay salaries from his pocket.

The community indicated that the department has refused to hold a meeting with them together with the contractor to provide them with the real reasons as to why the construction of the road has been stopped.

 

1. The Department of Roads Public Works – North West (DPWR)

 

In response, the North West Department of Public Works and Roads gave a presentation of the facts surrounding the projects in question as follows:

 

1.2.1. Road D201

 

In 2019, representatives of communities approached the Department from villages enquiring about the delay in the construction of the road D201 from gravel to tar. Several meetings in the office of the speaker of the Greater Taung Local Municipality with all villages affected by the road followed this. After a marathon of meetings an agreement was reached that in the interim the road will be re-gravelled so that it becomes trafficable while waiting for the Department to complete other current commitments in the area.

 

A procurement process to appoint the service of a suitable contractor to commence with the works was started. This was done with the use of the Departmental Framework Agreement Contracts wherein contractors that tendered for re-gravelling are selected and given Bill of Quantities to complete, all Supply Chain Processes are followed and a qualifying bidder is awarded a bid. Unfortunately, none of the bidders who submitted the bids were successful and the bid could not be awarded.

As pressure from the communities mounted, the Department had to look at other options that would speed up the process of getting a contractor on site to commence with the work. At the time, the Department was in a process of implementing the Public Protector’s agreement hence the use of Vuk’uphile Contractor Development Programme and thus Lebo Tebo Trading and Projects was appointed as one of the contractors on the development programme.

 

The North West Province experienced floods at the end of 2020 to early 2021 and the communities became dissatisfied, as the road was also flooded. The Department held a number of meetings with community representatives at the time, with a view to resolve the problem and get the contractor back on site. The meetings could not yield results as the community continued to raise concerns on the re-gravelling project and the standard of work on site. The Department then took a decision to remove the contractor from site because of community protests with a view to also explore other options to permanently salvage the situation.

 

The Department approached the Provincial Treasury for additional funds in order to prioritise the project in the 2021/22 financial year, and funds were granted at the beginning of 2021/2022 financial year. The Department proceeded to finalise the designs for upgrading of the road and advertised a tender to upgrade the road from gravel to surface standard (tar).

 

The tender for Road D201, from Pampierstadt to Matlapaneng was advertised and the tender closed on 05 August 2021. The bid was awarded in November 2021.

 

1.2.2. Road D206

 

The Department appointed the contractor on 27 September 2019 for implementation of contract, Botong Construction,: PWR 239/14 to upgrade from gravel to tar roads: D209, D208, D206 and D222, D997, D220 and Z216 from Molelema to Matsheng for approximately 10km. The project value amounted to R 65 018 991.18 Vat inclusive. The commencement date of the works was on 17 February 2020 after the receipt of a work permit, insurances guarantees, program of works and OHS plan, etc. The anticipated completion date was set to be 25 January 2021.

 

At the initial stage of the project, the Department formally wrote to the contractor, reminding them about affirmations they made to the Department to complete the scope of 10 km within the tendered amount of R 65 018 991.18 at time given of 10 months. This assurance came during tendering stage when the risk or technical assessment report was done prior awarding of tender. This report clearly showed that there were arithmetic error on the contractor’s Priced Bill of Quantities.

Since the contractor committed to complete the project despite the error on the Bill of Quantities, the Directorate: Roads Project Implementation had an obligation to ensure that the arithmetic error does not become a risk to the Department but rather remain the obligation of the contractor as initially agreed and committed during tendering stage.

On 02 June 2020, The Department requested a revised Bill of Quantities with balanced rates and a detailed Project Execution Plan that demonstrates how the afore-mentioned contract amount will be utilised to complete the approved scope of work as outlined in the approved contract document. This request was made strategically to manage any potential variation order that might come to cover-up the errors made during procurement stage.

It is therefore regrettable that the contractor refused the instruction of balancing the rate, opting to request Variation Orders, making administration of the project impossible. The Department was left with no option but to terminate the project as there were no prospects to agree with contractor and complete the project within budget, scope and time bound as initially agreed by parties in contract.

 

The North West DPWR reported on the following challenges:

• The Department had a contractor that was not committed to complete the project at the tendered amount of R65 million which is an average competitive rate of R6.5 million per kilometre but rather request unprecedented and irrational adjustment on contract value of 75 per cent.
• The contractor refused to balance the rates, and stated that, they will only complete seven kilometres with the available approved funds.

 

In response to the above listed challenges, the North West DPWR included the following mitigation strategies:

• The contractor failed to adhere to agreements made at tender stage of assuring to complete the project within the approved contract value, time and scope/quality. This occurred despite Senior Management and Political Head’s interventions as well as Community Stakeholders that had numerous engagement with all parties striving to ensure success of the project that has been long outstanding in the area.
• Therefore the Department was left with no option but to terminate the project as there were no prospects to find consensus with the contractor and complete the project within budget, scope and time bound as initially agreed by parties in contract.
• The Department will, now, resume a new procurement process that will ensure completion of the project as initially planned. It will further ensure that service providers that have arithmetic errors of over 5% on the Bills of Quantities do not get recommendation for appointment. Balancing of rate or error corrections will be done and concluded prior to the project being awarded.

 

1. Observations

 

Having listened to both the Petitioner and Department, the Committee made the following observations:

 

2.1. Road D201

 

The Department noted that it acted to appoint a contractor to complete the upgrading from gravel to surface road standard of Road D201. At the time, the Department was in a process of implementing the Public Protector’s (PP) agreement hence the use of Vuk’uphile Contractor Development Programme. The Department needed to clarify the details of the PP Agreement and effect this had on the operations of the Department.

The Department indicated that a contractor on the Vuk’uphile Contractor Development Programme, i.e. Lebo Tebo Trading and Projects was appointed as one of the contractors on the development programme.

The Department had to explain what the contract value awarded to Lebo Tebo Trading and Projects was, and how much of this allocation was spent.

The Department reported that the North West Province experienced floods at the end of 2020 to early 2021 and the communities became dissatisfied as the road was also flooded but there was no clarity as to what the role of civil engineers was in ensuring that the project was less affected in the process.

 

2.2. Road D206

 

The construction company is referred to by at least three different names, which are:

• Botong Construction JV Nkolele Projects, under the list of winning bidders.
• InvestTong Construction, in the petition correspondence.
• Botong Construction, in the Department’s presentation.

The contractor was appointed in September 2019, but work only commenced on 17 February 2020 after the receipt of a work permit, insurances guarantees, programme of works and Occupational Health and Safety (OHS) plan, etc.

The petition letter mentions that a community meeting was held on 20 June 2021 with community leaders where various allegations were made. The Department highlights that it had a report that clearly showed arithmetic errors on the contractor’s Priced Bill of Quantities. The Department requested a revised Bill of Quantities on 02 June 2020, but reports that the contractor did not comply.

The Department concluded the presentation that it plans to resume a new procurement process that will ensure completion of the project as initially planned. The reported physical completion of the project stands at 58%, it remained unclear what that means in completed road infrastructure in kilometres.

The Department reported that it will further ensure that Service Providers that have arithmetic errors of over 5% on the Bills of Quantities do not get recommendation for appointment. It also plans on balancing the rate or error corrections will be done and concluded prior to the project being awarded.

 

1. Deliberations

The Committee noted with concern, that there were no reports from the provincial department showing that the quality delivered was on par with what was expected. The presenter kept referring to the duty of the project engineer to ensure that the contractor’s work was on par. Unfortunately none of the reports from the engineer that unlocked payments to the contractor during the different phases were presented to the Committee.

Many explanations were given with no reference to reports that showed proof of what the Committee was told. The presenter needed to understand that accountability means that the evidence that shows that the money spent was worth what was delivered, must be provided.

 

1. Recommendations

 

Having considered the petitions, the committee recommends that the Minister of Public Works and Infrastructure:

 

4.1.  Ensures that the Provincial Portfolio Committee, the Provincial Public Accounts Committee, and the NCOP Select Committee will be furnished with every single report on the procurement and bidding process; the social facilitation reports; the project manager reports; and that the investigative work of the SIU on the D201 and D206 projects for further processing and probing.

4.2.  Ensures that the Committee is furnished with enough information pertaining to issues concerning the construction of roads in the North West province, particularly because the DPWR is under administration.

4.3.  Briefs both the Portfolio and Select Committees, jointly with the SIU, on matters relating to the North West roads.

 

 

Report to be considered.